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Camphor This finds its usage in the religious rituals and pharmaceutical industry. The ratio of consumption profile in these two sectors is 80:20. There are two varieties of camphor: Technical grade(93-94% purity) Pharmaceutical grade(98% purity) It can also be classified according to the nature of production Natural camphor Synthetic camphor Manufacturing process The main raw material used for producing camphor is alpha pinene. This is a constituent of turpentine and is obtained by the fractionalization of the oil in vacuum. This is fed into the reactor in the presence of a catalyst in vacuum and at high temperature to manufacture crude camphene. Turpentine oil is obtained along with rosin, from olefin resins which is extracted from pine trees. This is then esterified using acetic acid and a catalyst, to produce acetate, which is then reacted to with xylene and methanol to produce isoborneol and acetate. This is hydrogenated to form crude camphor, which is distilled to form camphor. Camphor and Allied Products Ltd is the largest manufacturer of camphor in the world. It has sourced its technology from Du Pont. There are several smaller players in the markets who manufacture camphor from the intermediate stage. Markets Technical grade camphor constitutes nearly 80% of the total market share. The camphor tablet makers who add wax and hexamine are used for different religious purposes. The balance is used in the pharma industry for the manufacturing the pain relievers. This is also used in small quantities to manufacture explosives and nitrocellulose, films and celluloid plastics, special lacquers and varnishes. The demand is skewed geographically and high in the months from June to November due to religious purposes. The demand and supply balance is evenly placed with no volatility as regard to the demand. There are no substantial exports and imports are erratic. The prices are very steady, as there is a near monopoly of the producer. Pricing Mechanism Almost 60-70% of the major raw material, especially OPR and turpentine is imported. The reasons are that the yield from Indian turpentine is 17% compared to 80% from imported turpentine. Availability of OPR is difficult in the Indian scenario due to restriction on the tapping of the oil. OPR is converted into rosin and turpentine in 80:20 ratio. Thus import becomes a necessity. The decision to import turpentine or OPR depends on the price realization of rosin. Industry Structure This is not a capital-intensive industry and the power requirements are very low. The cost of setting up a 2,500-ton plant is about Rs250mn. Outlook Demand will grow at 7% till the end of year 2000. Exports are expected to increase as western countries are closing down the production of camphor. The prices are going to be more volatile as the prices of raw materials are rising. The demand is expected to be around 7,000ton this year. Other sector reports Previous chapter Next chapter

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